One major climber was FTSE 100 miner Rio Tinto, which closed up by around 4.9 percent. JPMorgan added the company to its list of top picks for European stocks on Monday, and this helped the basic resources sector close roughly 2.7 percent higher.

Mining stocks such as Antofagasta, BHP Billiton and Anglo American were also boosted by an update on market reforms in China. The reforms could boost market liquidity in China, and include proposals to open up its stock and bond markets, relax foreign ownership of companies and pursue both inward and outward investment.

U.S. Treasury Secretary Jacob Lew traveled to China on Monday to discuss the pace of reforms with the Chinese government, and also the yuan currency.

European investors were also buoyed by sentiment in the U.S., where the Dow Jones Industrial Average hit an intraday record on Monday, having closed at a new high on Friday.

Greece hit by election fears

Greek stocks bucked the European upward trend and were down around 2.3 percent on Monday. Traders suggested the decline was due to uncertainty ahead of local and European elections, with the radical leftist Syriza party seen leading in the polls.

In addition, some were concerned about how the MSCI's rebalancing of its indexes come Wednesday could impact Greek stocks.

One analyst told CNBC via email: "It's true that today Greek stocks have been falling. The reason is mostly the upcoming MSCI rebalancing. According to market estimates, Hellenic Petroleum's stock will come out of the index and Eurobank's stock will come in."

Ukraine in focus

Europe gains were also capped by concerns in Ukraine on Monday. In the eastern city of Donetsk, 89 percent of the populace is said to have voted in favor of seceding from Ukraine. The West is concerned the referendum could be a prelude to annexation by Russia, as occurred in Crimea in March after a different secession vote.

European Union foreign ministers met in Brussels on Monday and agreed to impose sanctions on two Crimean companies and 13 more Russian and Ukrainian individuals, according to Reuters. The names of the individuals and companies will be published on Tuesday.

Meanwhile, Alstom shares closed nearly 2.7 percent and Siemens shares closed 1.9 percent higher following comments from Angela Merkel over the weekend. The German chancellor said she would support Siemens's bid for Alstom if both parties decided it made sense. U.S. giant General Electric has also bid for Alstom's energy business.

Pfizer's ongoing attempts to acquire U.K. rival AstraZeneca will be in focus later this week. Pfizer boss Ian Read will appear before a U.K. business select committee on Tuesday alongside AstraZeneca's Pascal Soriot. Pfizer has upped its bid for AstraZeneca to $106 billion, and said that the prospective acquisition would not hinder drug research.